Refurbishing Your Retail Strategy

Gene Marks
, ContributorI write about technology developments for small business owners.Opinions expressed by Forbes Contributors are their own.

Oklahoma-based Crest Foods probably wouldn't leap to mind as a pioneer in customer service. As the story goes, in 1964, company founder Nick Harroz pieced the name together from letters of leftover signs from three other grocery stores he used to own.

Now with six locations, Crest promises to "stack it high and sell it cheap." Bruce, Nick's son, runs the show. At 57, Bruce isn't remotely a gadget guy. He doesn't do e-mail. He drives a used car. He's about as Old School as you can get.

He's also no dummy. To hold his own against
Wal-Mart
, Bruce knows that he has to deliver great customer service--and that means embracing technology. If you run a retail business, better pay attention. This is your future.

A few months ago, Bruce overhauled the checkout system at one of his stores. The goal: to eliminate four check-out stations manned by four cashiers and instead have them supervised by one person. He bought four Fast Lane Self-Checkout Units--each with a touch-screen display, scanner and a bagging platform--and one remote-attendant that acts as a traffic-control center, all made by
NCR Corp.
. These units let customers scan bar codes, bag and pay for their purchases all on their own.

Bruce had some trepidation, of course: "My biggest concern was pilferage." And yet, the amount of shrinkage (inventory lost to damage or stolen goods) hasn't budged since the installation. Shoppers, it seems, are pretty honest.

Bruce's other concern was the size of the investment: $140,000 for those four units, including installation and training. Bruce paid cash up front for the whole lot. That's a big nut for a small business. Software support and maintenance runs another $8,000 a year. Bruce has a separate inventory-management system, which his four in-house programmers now are lashing to his new self-service register consoles. That's costing him too.

With the new system, Bruce conservatively estimates annual savings equivalent to "at least two full-time cashiers." At a minimum wage of $8 per hour, that's an annual savings of about $35,000 per year. So why bother? "The cost savings are nice," says Bruce. "But that's not why we've made the investment."

The real reason is customer service--and that means getting people in and out of the store as fast as possible. Bruce is starting to see a "noticeable up-tick" in turnover (though he won't quantify it). "My customers love it," he says. "And we no longer have long checkout lines. Things move a lot faster."

Bruce plans to roll out these self-service cash registers at his remaining five locations. Chances are, he'll finance future purchases through NCR, which offers payment terms up to five years.

No one gives you a badge of courage for being small. If Wal-Mart and other big retailers are investing in technology to improve customers' shopping experience, smaller fry like Bruce have no choice but to keep up.